2.03 EMPLOY ENTREPRENEURIAL DISCOVERY STRATEGIES …stowetechnologymath.weebly.com/uploads/3/8/3/0/... · 2.03 EMPLOY ENTREPRENEURIAL DISCOVERY STRATEGIES TO GENERATE ... What are

2.03 EMPLOY

ENTREPRENEURIAL

DISCOVERY STRATEGIES

TO GENERATE FEASIBLE

IDEAS FOR BUSINESS

VENTURES/PRODUCTS

SOURCES OF INFORMATION

ABOUT GLOBAL TRENDS

• Newspapers

• Trade publications

• Industry specific, such as “Cosmetics International,” “Music

Week,” “Nursing Times,” etc.

• Research institutes

• Office of Scientific and Technical Information, National

Institute of Child Health and Human Development

• Travel

• Trade shows

• Companies display and demonstrate their latest

products/services

• Can be public or private (only company representatives

can attend)

GLOBAL TRENDS AND

OPPORTUNITIES

Economic Environment

• The following factors determine a nation’s

potential as a host for international business

expansion:

• Nation’s size (# of people)

• Per capita income

• State of economic development

• Infrastructure

• Transportation, communications, banking, utilities,

public services

• Exchange rate

People must have money and be willing to spend it.

Stage of the business cycle (prosperity, recession,

recovery, etc.)

Inflation

Interest rates

Unemployment rates

Investor confidence

Tax rates

Currency exchange rates

Foreign economic conditions

ECONOMY

Social-Cultural Environment

Successful businesses stay on top of changes so they

can remain sensitive to customer needs and wants.

They ask the following questions: What do customers

value?

What are their attitudes toward the world around them?

Our society is transforming at a rapid rate.

• All aspects of the nation’s culture including:

• Language Education

• Religious attitudes Social values

GLOBAL TRENDS AND OPPORTUNITIES

Examples of social trends that affect business decision

making:

• Changing family roles:

• More working moms

• More single parents

• More two-income households

• More diverse attitudes about what a family is

• More diverse attitudes about roles within families

SOCIETY AND

CULTURE CONTINUED

Need for convenience

• People are busier than ever.

• Customers are often willing to pay more for products that save

them time or fit into their hectic schedules.

• Examples:

• Frozen dinners

• Drive-thrus

• 24-hour gyms

SOCIETY AND

CULTURE CONTINUED

Concern for fitness and health—has affected businesses in

all industries

Going “green”—customers are concerned about the

environment but also about their wallets

SOCIETY AND

CULTURE CONTINUED

Technological Environment

• Internet surpasses political, economic, and

cultural barriers

• Reaches every corner of the globe

• However, many countries do not use the

internet as extensively as in North America

GLOBAL TRENDS AND

OPPORTUNITIES

Technology

• Perhaps the most rapidly changing category of information

• Falling behind on technology has been the downfall of many

businesses.

• High-tech businesses aren’t the only ones that need to

monitor technology.

TECHNOLOGY

Political-Legal Environment

• Laws and trade regulations vary from

country to country

• Political conditions can influence

international marketing

• Labor conditions

GLOBAL TRENDS AND

OPPORTUNITIES

Changing laws and regulations, such as:

• Minimum-wage laws

• Environmental-protection laws

• Worker-safety laws

Monetary and fiscal policies

Import/export restrictions and regulations

Government relations with specific industries (Example:

subsidies for agricultural businesses)

Marketing-specific legislation

State and local laws

Political climates and stability in foreign markets

GOVERNMENT

POTENTIAL OF GLOBAL

TRENDS AND OPPORTUNITIES

• When determining whether or not to enter a global market,

local industries, economic conditions, geographic

characteristics, and legal restrictions must be considered

• Reasons to expand in the global market include:

• Expanding markets – 95% of the world’s population lives

outside the U.S.

• Cutting costs – reduced labor and transportation costs

• Gain access to resources – raw and human resources

• Capitalize on special features of a location – sociocultural

and political or legal reasons may make doing business

elsewhere appealing

Brand competition

• Competition between two similar products

• Example—Chevy v. Ford; Pepsi v. Coke

Competition for substitute products

• Competition between two different products that satisfy the

same need

• Example—movie theaters vs. bowling alleys

General competition—competition among all businesses for

scarce customer dollars

COMPETITION

INSIDE-OUT VS. OUTSIDE-IN

INSIDE-OUT ANALYSIS

• Considering what the entrepreneur and

start-up are able to do

• Resources

• Capabilities

• Competitive advantage of the new

business venture

2-12-16

OUTSIDE-IN ANALYSIS

• Considering the general environment and the

industry environment in which the venture might

do business

• General environment: broad factors like

political and legal, sociocultural, macroeconomic,

global, and technological factors

• Industry environment: specific factors like

ease of entry for new competitors, availability of

substitute products/services, existing rivalry

among competitors, supplier power, buyer power

WORK EXPERIENCE CAN HELP

IDENTIFY OPPORTUNITIES FOR

VENTURE/PRODUCT CREATION

• The more work experience you have, the more

likely you are to see an opportunity in different

situations

• You have been “behind the scenes” and have a

more intricate look into how things work

• Work experience can often lead to good

business ideas through listening to customer

complaints

IMPACT OF EDUCATIONAL BACKGROUND

ON DETERMINATION OF OPPORTUNITIES

FOR VENTURE/PRODUCT CREATION

• Many entrepreneurs are able to sell

their own skills and knowledge in a

particular area by opening a

consulting firm

IMPORTANCE OF CONSIDERING PERSONAL

INTERESTS WHEN DETERMINING

OPPORTUNITIES FOR VENTURE/PRODUCT

CREATION

• If you open a business involving things that

interest you or a hobby you have, you are

more than likely already very knowledgeable

about it

• Many entrepreneurs are able to turn a hobby

or personal interest into a successful

business

EXPERIENCE AS A RETAIL OR

INDUSTRIAL CUSTOMER

• Good business ideas can come from

the frustration of not being able to

find the right product or service to

meet your needs

DETERMINING IF OPPORTUNITIES

ADDRESS SPECIFIC UNMET NEEDS

OR PROBLEMS

• Determine if your product is something

that consumers and want/or need

• What need does it satisfy?

• How will they use it?

• Would they be willing to buy it?

• This is often determined through market

research

REASONS TO ANALYZE THE

ENTREPRENEUR AND HIS/HER TEAM

WHEN ASSESSING OPPORTUNITIES

• The new product should be appropriate

for the business’s image, goals,

strengths, and resources

• Should provide the company with a

competitive advantage

• Has a feature that is more satisfying than

competitors’ products

REASONS TO CONSIDER NEEDED

RESOURCES WHEN ASSESSING

OPPORTUNITIES

• The company needs to be able to afford

to produce and market the product

• People, expertise, equipment, money

Regular monitoring of the environment provides you the

capability to formulate essential adjustments in the

organization's reaction to the factors that can turn out to

be the difference between success and failure.

An environmental scan is conducted to collect data to

answer questions about the present and future.

• Aids in anticipating changes

• Answers the question, “Where are we now?”

• Provides a starting point for businesses’ planning of goals,

objectives, and actions that answer the question, “Where

do we want to be?”

REASONS

http://www.nsba.org/sbot/toolkit/ts.html; http://www.123helpme.com/organizational-environmental-scanning--view.asp?id=164873

Fast changes in today's market and recent and emerging

business practices make it is easy for an organization to

fall behind

To keep up in areas such as technology, regulations, and

various rising trends

Reduces the possibility of being blindsided

By understanding two elements: external influences and the

organization's internal practices, an organization can take

action in a more suitable and efficient manner

REASONS

CONTINUED

http://www.123helpme.com/organizational-environmental-scanning--view.asp?id=164873

SWOT—Strengths, Weaknesses, Opportunities, and Threats

• (specific analysis of your own business)

STEEP—Social, Technological, Economic, Ecological, and

Political

• General awareness of the industry or service area you operate in

PEST– Political, Economic, Social, and Technological

• Classic situational analysis headings, guaranteed to prompt nods of

approval when used in business presentations. You may see

'Environmental' used instead of 'Economic' depending on the context.

Either version is actually a very useful analysis and interpretation tool for

business and marketing situations. PEST is sometimes extended to

'PESTELI' in which the headings: Ecological (or Environmental),

Legislative (or Legal), and Industry Analysis are added, and other

variations.

TOOLS

http://www.businessballs.com/acronyms.htm ; http://www.venturenavigator.co.uk/content/business_analysis_swot?s=true

Surveys

Questionnaires

Focus groups

Informal conversations

Newspapers, magazines, trade journals

Television news and programming

Market research studies

OTHER TOOLS

Interviews with business officers, owners, managers

Comments made by business officers, owners, managers

National and local newspapers

Trade publications

Business magazines

Websites: Hoover’s, Morningstar, brokerage firms, credible

financial sites

Observations

Research findings

Input from professional organizations

SOURCES FOR

CONDUCTING AN

ENVIRONMENTAL

SCAN

Environmental Scanning is a method that allows decision makes

to both understand the external environment and the

interconnections of its various sections and to translate this

understanding into the business’ planning and decision-

making.

Scanning provides strategic intelligence useful in determining

organizational strategies.

The goal of environmental scanning is to alert decision makers

to potentially significant external changes before they

crystallize so that decision makers have sufficient lead time

to react to the change.

Continuous scanning is required if decision makers are to

understand, anticipate, and respond to the threats and

opportunities posed by changes in the external environment.

Morrison, J.L. (2005, March 9). Environmental scanning. Retrieved April 11, 2011, from http://horizon.unc.edu/courses/papers/enviroscan/

What is the purpose of the environmental scanning?

Who will participate in environmental scanning?

What specific tasks will they be responsible for?

What are the time commitments?

STEP ONE: IDENTIFY THE

PURPOSE, PARTICIPANTS

AND TIME

COMMITMENTS.

SWOT, STEEP, and/or PEST Analyses

Surveys

Questionnaires

Focus groups

Informal conversations

Newspapers, magazines,

trade journals

Television news and programming

Market research studies

STEP TWO: CARRY OUT

THE SCANNING

ACTIVITIES.

What is the current external environment? What are the implications of these issues for business?

What key forces in the business’s environment need to be addressed and which ones are less important?

What trends and issues are affecting business?

What is the impact of the trends on business?

How might the environment change in the future?

How will businesses’ decisions and actions influence this environment?

How do customers, interest groups, community organizations, agencies or governments impact the environment?

What factors are within a business’s control and which are beyond its influence?

What could a business do to affect the impact of these factors?

STEP THREE: ANALYZE AND

INTERPRET THE

STRATEGIC IMPORTANCE

OF ISSUES AND TRENDS.

STEP THREE CONTINUED

http://thinkingfutures.net/wp-content/uploads/Doing-Environmental-Scanning-Guide-Feb-12.pdf

Not all issues and trends can be addressed at once.

Prioritize for selection:

• Is it relevant to your business?

• Will it give you an advantage?

• Will the results be significant, noteworthy, a major or minor

consequence?

• Is it feasible and realistic to achieve the results in the

selected areas?

• Will addressing a particular issue maximize the reach and

spread of the goal?

• Is the issue / problem urgent?

STEP FOUR: SELECT

ISSUES AND TRENDS

FOR FURTHER ACTION.

STEP FIVE: REPORT AND

DISSEMINATE THE

RESULTS.

The report should synthesize and summarize the environmental scan for key decision–makers. The report should include a summary of key trends in the short-, medium-, and long-term with a sense of prioritization that will present a clear and concise picture of the environment for your business and the possible decisions, strategies, plans, and resources that will likely be required to deal appropriately with these trends.

The report should summarize and clarify whether the business’s current strategic direction, mandate, complement of programs and services, and capacity are adequate to address the pressures of the environment in the short- and medium-term. A key question being answered is: what would it take to make your business more profitable? Does your business have the ability to clearly deliver on its stated strategies? Are new strategies or approaches required to better deliver on stated commitments?

http://www.finance.gov.sk.ca/performance-planning/201011EnvironmentalScanGuidelines.pdf

Area of Analysis

Issue(s)/Trend(s)

Brief Analysis

Source(s)

Impact of Trend(s)

Proposed Action(s) to Take

ENVIRONMENTAL

SCAN REPORT

It’s not a one-time activity, or even a once-a-year activity.

It must be conducted on a continuous basis since the

environment is dynamic and new trends can arise at any

time.

Scanning on a continuous basis allows your business to:

• Act quickly

• Take advantage of opportunities before competitors do

• Respond to threats before they can cause damage

STEP SIX: SCAN ON A

CONTINUOUS BASIS.

IMPORTANCE OF EVALUATING

MARKET TIMING WHEN ASSESSING

OPPORTUNITIES

• If economy is in recession or

depression, coming out with a new

product that satisfies only wants

instead of needs might not have a

large amount of sales

PROCESSES USED TO

ASSESS OPPORTUNITIES

• Market research and the use of

prototypes are often used to evaluate

customer responses to the product idea

• Product may also be test marketed to

identify the potential success

POTENTIAL TEST QUESTIONS

Which of the following is a global trend that might

encourage an entrepreneur to consider

international business opportunities:

A. Higher allowances

B. Enforceable trade agreements

C. Lower tariffs

D. Flexible currency rates

POTENTIAL TEST QUESTIONS

When determining venture-creation opportunities,

entrepreneurs must first

A. obtain financing.

B. identify staffing needs.

C. conduct research.

D. select a location.

POTENTIAL TEST QUESTIONS

Jessica's hobby is making jewelry. There is

potential to sell her bracelets and earrings on

eBay. This is an example of identifying a product

opportunity by considering

A. demographic changes.

B. consumer attitudes.

C. business processes.

D. personal experiences.